Sen. Inhofe's Defense of Stock Situation; Giuliani Meets with the King of Bahrain; Rep. Mark Meadows Out of Running for Chief of Staff; Pelosi Cuts Deal With Critics; Trump: Cohen, Prosecutors Are Trying to "Embarrass Me". Aired 12:30-1p ET

Aired December 13, 2018 - 12:30 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[12:30:53] JOHN KING, CNN ANCHOR: Welcome back.

The Republican senator who leads the Armed Services Committee facing scrutiny today for buying stocks in a defense contractor after urging the Trump administration to spend more money on the military. Financial disclosure form show that Senator James Inhofe from Oklahoma bought to $50,000 to $100,000 dollars in stock in the company Raytheon, a prominent defense contractor. But the House Communications director says it was a mistake and that the senator canceled the transaction as soon as he became aware of it.

CNN's Lauren Fox is live for us on Capitol Hill. Lauren, you just spoke to Senator Inhofe. What did he say about this?

LAUREN FOX, CNN POLITICS CONGRESSIONAL REPORTER: Well, he said look, this is a big misunderstanding. I did not mean to just purchase stock right after urging the president to boost military spending. He told me that this is a large firm that makes investments and it's blind. He doesn't know what they're investing in.

Here's what he told me earlier today.

(BEGIN VIDEO CLIP)

SEN. JAMES INHOFE (R), CHAIRMAN, ARMED SERVICES COMMITTEE: I had no saying in any of the investments that took place by this group because they're -- I'm one of 900 and some clients that all invest in the same thing. Now, so that it wouldn't look bad, I have said when you come to our account, you can take out anything that might look like an aerospace or a defense contractor. And that's what they did.

(END VIDEO CLIP)

FOX: Now John, I spoke with ethics experts this morning and they told me that it is actually not illegal for members of Congress to invest in companies that have something to do with how they are regulating them. So, somebody like Inhofe can absolutely invest in a company like Raytheon. But obviously, it opens up questions about ethics and how it looks. And that is exactly why Inhofe told me, he no longer will have his investment firm making those kinds of security by and from going on -- going forward, that's how he's going to change this.

KING: Lauren Fox, live for us on Capitol Hill. Appreciate you catching up to the senator and acting quickly in this case.

Does that put it to rest that, I saw it, said, oops, can't do that, boom?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: It seems a little fishy to me and shout out to the Daily Beast for breaking this story and reporting on this. I mean, he is the leader of the Senate committee that is going to be approving the Pentagon's budget. So that raises conflict of interest questions of course as she noted. But he's been around for a while, he knows how this is. And the Daily Beast also noted that that letter to his financial adviser advising him not to invest in these defense stocks came about 20 minutes according to the metadata after they have reached out for comment.

So it does raise a ton of questions about his conduct. And I think his office has quickly jumped on it this trying to downplay it and say that there was nothing negative.

KING: Lesson being that if you're a member of Congress anyway but especially if you're a senior member, committee chairman or ranking member, this should be in place already. You shouldn't have to wait until a news organization calls to ask you about something. This should be the -- the probe should be in place already. But I guess kudos to the senator for at least realizing it as a problem and acting quickly on it.

While we're in the swamp conversation, I want to show you a photo, this is the president's lead attorney. It's a key moment in the Mueller investigation, there's a lot happening that's why Rudy Giuliani is in Bahrain.

Sitting down here overseas, his majesty, the king receives high level U.S. delegation. No. Rudy Giuliani, again the president's lead lawyer is not in Bahrain on official U.S. government business. He's there soliciting a contract for his consul -- his law firm slash consulting firm which does security consulting around the world.

Should the president's lead attorney be using that position? Now, Rudy Giuliani who's America's mayor after 9/11. He's well known around the world, but at the moment he is the lead attorney for a president who says he will drain the swamp. That's the swamp.

PERRY BACON, SENIOR WRITER, FIVETHIRTYEIGHT: That is the swamp.

KAROUN DEMIRJIAN, CONGRESSIONAL REPORTER, THE WASHINGTON POST: OK, to be doing so at this time is especially bad optics because Bahrain is an ally of Saudi Arabia. And right now, front and center in Congress right now, we're talking about rebuking the crown prince over the death of Saudi journalist Jamal Khashoggi. We're taking about a Yemen resolution being on the floor right now to withdraw U.S. support from that Saudi-led coalition.

I mean, this is the worst possible timing if you're going to doing the swamp, particularly the Gulf swamp, that kind of outreach. Just don't do it this week when all the -- when all eyes are on the Gulf and on Saudi Arabia and the vitriol is an all time high. So I don't see that --

KING: How about if he agreed to comeback into public service.

[12:35:02] I know he's the president's private attorney, he's not a government official but he's still working for the president of the United States, has access inside those gates.

How about, can't touch this stuff while I'm doing this work? What's so hard about that? And I don't think --

BACON: Well, if you're in a foreign policy, being an ambassador, being a secretary of state, you're confirmed to a job, joined the NSE, we have people of (INAUDIBLE) on the country that is not the president's lawyer.

KING: His majesty, the king receives high level U.S. (INAUDIBLE). OK.

Up next, it's the end of the year Congress, still has a lot left to do.

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[12:40:03] KING: Topping our political radar today, a big list of leftovers for the lame duck Congress. This afternoon, a big vote in the United State Senate on the U.S. role in the Saudi-led war in Yemen. The foreign focus, a small part of a long to-do-list, one of those items, criminal justice reform is a presidential priority. But today, a Republican senator says, hold up and wait a minute before we vote.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Can you try and block it?

SEN. JOHN KENNEDY (R) LOUISIANA: Yes.

UNIDENTIFIED MALE: Can you?

KENNEDY: Probably not.

(END VIDEO CLIP)

KING: Congressman Mark Meadows off the short list to become the next White House chief of staff. The White House confirms that, saying the North Carolina Republican has, quote, a great friend to President Trump but that the president believes he's needed in Congress. This comes just a day after the president told Reuters, Meadows was in the running and called him a great guy.

Meanwhile, the former Republican House Speaker Newt Gingrich laughing off rumors he's under consideration. Speaker Gingrich was at the White House yesterday with his wife. He tells Fox he was just wandering around, looking at the Christmas decorations.

Melania Trump opening up in a new interview, telling Fox News, she knows, she's going to get criticize of what goes on at the White House. She says the hardest part, is people using that criticism for their own gain.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: Would you want to stay for a second term?

MELANIA TRUMP, FIRST LADY OF THE UNITED STATES: I think my husband, he's doing an incredible job. The country does best ever.

HANNITY: What's been the hardest thing you have to deal with?

M. TRUMP: I would say the opportunists who are using my name or my family name to advance themselves from comedians to journalists to performers, book writers.

(END VIDEO CLIP)

KING: We forgot to ask what was the easiest softball interview you've ever done. Oh, never mind.

BACON: This isn't the first White House where books (INAUDIBLE) about by the way just --

KING: Yes. Not the first White House.

BACON: This is not the first White House.

KING: Thank you for that historical perspective.

BACON: Yes.

KING: Look, apparently, dozens of people want to be the next White House chief of staff, that's what the president says. Mark Meadows, and we are talking about this during the break could have been a good fit. I mean, there are some questions about his own relationship with his own leadership in the party. But the president should pick at this moment in his presidency after the election, heading into the Mueller probe, Democratic House, somebody he likes and somebody he trusts and here we are. Used to be a plum job in Washington, why is it open?

COLLINS: Yes. He says he's got people lining up the door waiting to do this job. He told Reuters up to a dozen people. But we actually have a lot of people who have said that they do not want the job. And of course that the president directly goes to them and said, you can take over for John Kelly and be the chief of staff. They don't really have a lot of wiggle room, but we know, at least 30 percent of the cabinet and the Yankees' president said they do not want this job and are not interested.

So I actually think it's been a struggle for President Trump because he's not used to being in this position where he doesn't have just a slew of people that's he's got in his mind for this job. But that was one of the reasons he took so long for John Kelly to leave the White House even though he in the president has had this very tumultuous relationship is because there was no obvious replacement for him. Same thing with Jeff Sessions, there wasn't this obvious replacement.

When President Trump has someone in mind, he doesn't mind pushing the other person out the door as he kind of did with Reince Priebus when he had John Kelly in mind. So that's really been a struggle for the president. It's really a guessing game inside the White House who was going to be the next person to lead the West Wing.

CATHERINE LUCEY, WHITE HOUSE REPORTER, ASSOCIATED PRESS: It's taken on kind of a like a circus atmosphere. It reminds me a little bit of the guessing games and the drama during the transition. You have any all -- like practically everybody in the White House has been named as a possible option. New people like Piers Morgan throwing their hat in the ring. I mean, you have some people, you know, watching Newt Gingrich as he comes in and out of the West Wing. It's just like, there's all of this (INAUDIBLE) and not a lot of information.

(CROSSTALK)

DEMIRJIAN: I would just say, it's interesting that you've heard the names tossed around of least two kind of congressional people though, because in a Newt Gingrich time, he hasn't been around since the -- he's been off of the mainstream but it bring him back or Meadows.

I mean, look, the president is going to have a two-front war to fight in the next two years, right? He's not going to worry about his public messaging in 2020 but he also is going to have all these investigations napping at his heels. And he's going to have to figure out how to counter those and somebody who knows the inner workings of Congress is kind of (INAUDIBLE). So you're pulling a Piers Morgan who doesn't have any of that expertise or that sort of to say.

I know. I'm kidding.

(CROSSTALK)

DEMIRJIAN: But if they don't have somebody who knows the business, you need an insider otherwise they're kind of, you know.

KING: We don't know who it's going to be, but I'm going to -- I'm willing to bet it's not going to be Piers Morgan. He used to work here, he's a very nice man, but I don't think so.

Up next, Nancy Pelosi cuts a deal with her critics. Isn't enough to get her the vote she needs to get the speaker's gavel back?

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[12:48:52] KING: Welcome back.

Nancy Pelosi is celebrating today, now certain she has the votes to be speaker of the House when Democrats take control in January. She did have to make concessions to get to the finish line. Pelosi now backing new term limits on party leadership posts and promising she will at most, serve four years.

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REP. NANCY PELOSI (D), MINORITY LEADER: That's a long time. I was saying that one term is what I'll say. They were saying six months just to begin with. I feel very comfortable about what they are proposing and I feel very responsible to do that whether it passes or not.

(END VIDEO CLIP)

KING: Now some new poll numbers to consider at this big moment for Pelosi and the Democrats. Only 34 percent of Americans in our new CNN poll have a favorable view of Pelosi. That's weak. But she still polls better than the other three top leaders in Congress. That also carries over when you look at how the leaders are viewed within their own parties.

More than six in 10 Democrats approve of Pelosi. And you can see her counterparts there with lesser numbers. Which the lesson of that is that the one bipartisan agreement the country is everybody hates Congress.

Everybody -- but look, you know, couple of weeks ago, could she get the vote, how much is she going to have to give up?

[12:50:04] She was never going to serve more than two or four years anyway. She just methodically blew through her opposition.

BACON: I think both sides sort of won here. I would say if you are the Seth Moulton group, you wanted to get -- we want get new leadership at some point. We now get her on a timetable saying she will move on in some way. But for Pelosi, she was going to leave at that time anyway so it wasn't a huge concession. But I think it's a rare sort of win-win, everybody can say, I get what I wanted (INAUDIBLE).

KING: I agree with you except for the Seth Moulton part.

BACON: Maybe just Moulton himself.

KING: And in the sense that, has she not now wired this in a way that those who were most public (INAUDIBLE) her face got what they wanted, there would be a next generation of leadership but she's going to get what she wanted, it won't be them.

DEMIRJIAN: In a way this (INAUDIBLE) by Seth Moulton to try to kind of recover from what was a overlay bold step that he took in challenging Pelosi head on. And in a way right now -- I mean, she can skip over that generation, right? The people that actually challenged her that this time around are not the newest blood that's in the Democratic Party. And you can make a very decent argument because there are so many of them, because they're so diverse. Because they had such a ground swell, that they're the ones that need to be listened to and paid attention to.

So, I don't think with this deal she's going to be negotiating with Seth Moulton necessarily down the line. She has new people who are going to be able to be the ones advising or calling or making demands. That doesn't mean that you're going to see like Alexandria Ocasio- Cortez be the next speaker of the House if the Democrats sit in the majority. But, they're going to have more direct influence now and I don't think that this is a thing that has necessarily boosted Moulton (INAUDIBLE).

KING: That's a good thing if you listen to more people. If you listen to the new fresher voice and diverse in your party and then funnel it through your experience, that's a good thing.

Here's one of the challenges she's kind of to face. Some Democrats are going to say, let's impeach the president right out of the gates. Nancy Pelosi says, let's wait, let the prosecutors do their job. Come back and ask me this question six months is her point essentially.

Support for impeachment by party, 80 percent of Democrats. That's up from September. Only 36 percent of independence wanted to impeach, that's down from just in September. Seven percent of Republicans says about the same, eight percent. But you see, support for impeachment among independents going down on some.

So if I'm the Democrats and I'm trying to be governing for the country, proving ourselves to the country, that's a pause button.

COLLINS: Yes, they can't just answer to that core base that has been calling for the impeachment of the president in which they were originally were I believe. I think Nancy Pelosi and others who were here in Washington fully realize that is not a successful message to call for the impeachment of the president. And most critics of the president believed that, even James Comey said that during an interview this week that he does not believe that is the way that people should get Trump out of office. He believes, if they want him out of office, they should vote him out of office.

And I think that's a message you're going to hear the White House start to (INAUDIBLE).

KING: Well, one of the key players in all of this is the new recent developments in the Michael Cohen case. So we're going to take a quick break.

When we come back, the president just sat down for an interview with Fox News. He talks about the plea agreement, the sentencing of his long-time lawyer and fixer Michael Cohen. We'll be right back.

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[12:57:24] KING: This just in, the president's first on-camera reaction to the guilty plea of his long-time lawyer and fixer Michael Cohen. Among the charges, two felony campaign finance violations. The fed saying, the president directed Michael Cohen in those hush money payments to Stormy Daniels and Karen McDougal. The fed say, these are felony campaign finance violations. The president says --

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They put that on to embarrass me. They put those two charges on to embarrass me. They're not criminal charges.

What happens is either Cohen or the prosecutors, in order to embarrass me said listen, I'm making this deal for reduced time and everything else. Do me a favor, put these two charges on.

(END VIDEO CLIP)

KING: Number one, the body language. He is coming out of his chair. That's how mad he is about this.

Number two, that's not true. They are criminal charges. They are criminal charges laid out by the feds, they list them as felonies. They say he directed it.

And just to be clear, this is the Trump Justice Department, the Southern District of New York. Rudy Giuliani's former law partner runs the office in New York. This is not even Robert Mueller.

BACON: He got one thing right. They were embarrassing. They do. And I know that's why he's angry. I think you heard, I'm not (INAUDIBLE) to use those words very often. He looked angry. He looked plastered. This investigation is getting tougher on him.

COLLINS: And if you know President Trump at all, the one thing he hates the most is to be embarrassed. That is like the greatest and worst thing you could ever do to him or his family. And you could see him there, he said embarrassed multiple times to Harris Faulkner talking about that.

And we know he's embarrassed by this because this, Michael Cohen saga over the payments to the women has been one of the most sensitive issues for him dating back to even the beginning of the Russia investigation and Manafort and Sessions. Starting in April when you saw the President's reaction after they raided Michael Cohen's office and home and hotel. The president had an outburst and you see exactly why.

KING : He is trying to convince himself or his base, this is not criminal. He keep saying this is civil. No, these are criminal charges filed by his Justice Department that named him.

LUCEY: That's right. And he may also, as we watch this, the other argument he's making and he's made before and he makes today on Twitter is the idea that, you know, Cohen was trying to make a deal for himself. That he was trying to protect himself. But, yes, the president has been more worried about this --

KING: Cohen says, now they have National Enquirer, is on board with it.

UNIDENTIFIED FEMALE: Yes.

KING: The CFO of the Trump Organization is cooperating.

DEMIRJIAN: Yes, and you can argue with this over Twitter one by one. But when they say it in the courtroom then it's actually reinforces court documents, it becomes a much harder to just dismiss and push away.

KING: All right, the body language that was striking, the president coming out of his seat. Remember, this involves his own legal jeopardy. It also involves his life with the first lady. Embarrassing, you're right about that. That's word the president -- he likes elegant, he doesn't like the embarrassing.

Thanks for joining us today in the INSIDE POLITICS. A lot to continue in the conversation. Don't go anywhere, Brianna Keilar starts right now.